As awareness of running a sustainable business and protecting the environment increases, so does the business world's interest in the green economy. This is where the financial industry can also play a role in channeling green economy financing and carbon exchanges.

Permata Bank Chief Economist Josua Pardede highlighted the strategic role of domestic and foreign financial institutions as drivers in mobilizing capital for green investment through carbon trading.

"The financial services sector has a strategic role as an enabler in mobilizing capital for green investment through carbon trading," Josua told Suar in Jakarta, (16/7/2025).

Based on global practices from major banks, Josua explained that financial institutions can play a role in various capacities. These include providing credit for carbon project development,result-based finance, as well as channeling green investments through innovative financial products.

He also added that at the global level, several leading banks have created carbon unit transaction platforms such as Carbonplace, which facilitate carbon unit transactions in a secure, efficient and transparent manner, and provide liquidity and price transparency in the voluntary carbon market.

However, Josua Pardede also identified a number of key challenges that need to be overcome to attract the participation of domestic and foreign financial institutions in Indonesia's carbon market.

"The need for clear standardization and valuation of carbon units to reduce market volatility, periodic strengthening of the carbon trading system to ensure transparency, regulatory and legal certainty, and harmonization of national and international regulations."

In addition, Josua emphasized that financial institutions themselves should improve their capacity in risk analysis related to carbon assets and create carbon derivative products to expand investor interest.

Carbon exchange

Carbon trading in Indonesia has shown significant development, signaling progress in financing the national green economy. The Carbon Exchange (IDXCarbon), as one of the main instruments, has not only recorded impressive transaction growth, but has also gained recognition at the international level. 

The President Director of the Indonesia Stock Exchange, Iman Rahman, presented recent data that reinforces this optimism.

"As of July 11, 2025, IDX Carbon has recorded nearly 1.6 million tons of CO2 equivalent traded, with a transaction value of Rp77.95 billion," he said during the book launching event of Knowing and Understanding Carbon Trading for the Financial Services Sector at the Main Hall of the Indonesia Stock Exchange, Jakarta, (15/7/2025).

He further explained that this figure shows a substantial increase in activity in less than two years since the first trade on September 26, 2023. The number of service users increased from 16 to 113, and carbon retirement activity jumped from 6,260 tons in 2023 to 980,475 tons.

Iman Rahman also highlighted the important role of the financial services sector in this market dynamic. "Since the inaugural trade of IDX Karbon on September 26, 2023, 6 out of 15 initial buyers came from the financial services sector," he said. 

This demonstrates the direct involvement of financial institutions in mobilizing funds for carbon mitigation projects. Strict supervision from the Financial Services Authority (OJK) and system integration with the National Registration System (SRN) are key foundations in strengthening the integrity and reliability of the carbon market. Rahman emphasized, "OJK supervision and integration with SRN are fundamental factors that strengthen the integrity and reliability of our carbon market in the eyes of the international community.

The President Director of the Indonesia Stock Exchange also stated that the world's recognition of Indonesia's efforts in carbon trading is increasingly evident. He mentioned that on January 20, 2025, Indonesia successfully conducted the first transaction of carbon units to the international market, after obtaining authorization from the Ministry of Environment and Forestry.

Furthermore, on May 8, 2025, the Ministry of Environment and Forestry signed a Mutual Recognition Agreement (MRA) with the Gold Standard Foundation (GSF), an international carbon registration agency in Geneva, Switzerland.

Here are some of Indonesia's carbon market achievements

1. Based on data as of July 14, 2025, the development of carbon trading in Indonesia shows a positive trend, which is shown among others:

2. The total volume of transactions traded amounted to 1,599,336 (one million five hundred ninety-nine thousand three hundred thirty-six) tons of Carbon Dioxide Equivalent (CO2e) worth IDR 78 billion.

3. The price per carbon unit is Rp58,800.00 (fifty eight thousand eight hundred rupiah) or equivalent to $3.6 (three point six dollars) for IDTBS carbon units and Rp61,000.00 (sixty one thousand rupiah) or equivalent to $3.7 (three point seven dollars) for IDTBS-RE carbon units.

4. There are 8 projects registered, consisting of 1 project from PT Pertamina Power Indonesia, 1 project from PT Perkebunan Nusantara IV, and the rest from PT PLN Nusantara Power, and PT PLN Indonesia Power which is part of the PLN Group. The existing projects are technology-based solution (IDTBS) categories and come from the energy sector.

5. The proposed retirement amount is 980,475 (nine hundred eighty thousand four hundred seventy-five) tons CO2e.

6. The number of service users increased from 16 service users to 113 service users.

Opportunities for the company

In a talk show at the Main Hall of the Indonesia Stock Exchange, Jakarta, (15/7/2025). Bondan Susilo, Head of Environment Department, PT Astra International Tbk, emphasized the importance of carbon exchanges in achieving emission reduction targets both at the company level and in Indonesia's NDC (Nationally Determined Contribution).

Active participation in carbon exchanges, according to Bondan, not only helps companies achieve emission targets, but also provides multiple benefits for the national renewable energy ecosystem. "If we participate, for example by buying or selling there, it will improve the renewable ecosystem as well," he said.

The carbon market in Indonesia has great potential to be dominated not only by technology-based projects, but also bynature-based solutions, according to Astra's Head of Environment Department. 

Furthermore, he strongly advocates the development of these initiatives, seeing them as key to creating multiple environmental, social and economic impacts, and in high demand in the international market.

Bondan highlighted Astra-initiated projects, such as forest protection and social forestry, as clear examples of how nature-based solutions can provide comprehensive benefits.

"The project is socially viable, environmentally viable and economically viable," Bondan explains, referring to the social forestry model involving farmers. In this scheme, farmers not only get the fruit harvest, but also integrate it with the planting of forestry trees that function as CO2 sinks.